Back in January, we posted a fascinating 12-year chart from John that compared the speculative China Shanghai Composite Index with our favorite speculative market, the TSX Venture Exchange. What it showed was a remarkable similarity in trading patterns between the two markets over the last several years. And since we saw some very bullish signs in the Shanghai Index, trading at the time in the low-to-mid 2200’s, we felt even more confident with our analysis that the Venture Exchange bear market was over and a major new CDNX bullish phase was underway.
We’re now approaching the end of February and today the Shanghai Composite shot confidently past an important resistance band, gaining 30 points to finish at 2440, a 3.5% gain for the week and its highest close since mid-November. The CDNX is currently working through a resistance band of its own which we expect it will clear next week.
The bullishness in the Shanghai Index – it has advanced for six straight weeks – is a clear sign that it’s “risk on” in the global markets and that the world economy, despite a few glitches, is going to fare better this year than many people had assumed just a few months ago. Of course a major reason why is that central banks are printing money faster than rabbits can make bunnies. The world will pay for that later. In the meantime, we’ll all make bucket loads of money if we recognize that the trend is our friend.
Below is an updated chart from John on the Shanghai Index after this week’s important technical development, a decisive move past 2400. The Shanghai is going a lot higher this year – and so too is the CDNX.
BMR – China Breaks Out – Venture Is Next
Bert – I agree, we have been down long enough. If i may, i would like to
forget the chart(s) for a moment & emphasize the time of year. The long
winter will soon be over & when the birds start chirping, so do the
drills, in particular, in the Canadian Provinces & the territories.
We will be news released to no end, drilling starts, financing completed,
drill results, takeovers. The frenzy will start, our imagination will
have no limits, i am buying a new car with my profits says Andrew, i am
taking my lady on a cruise says Jeremy…. You have to grab your profits
first says Bert. I feel with more time, the Venture will be the place to
be, it will command attention & the more attention it gets, the more
traders who will take the plunge…
I’m allowed to dream aren’t i ? Good night !
Comment by Bert — February 24, 2012 @ 6:49 pm
I agree, Bert, the Perfect Storm has arrived or is about to arrive – activity on the ground is going to pick up and all this market needs is 1 or 2 very sizable discoveries, and kaboom. It will be a frenzy and a “reverse capitulation” as so many investors sitting on the sidelines try to pile in. Andrew gets a new car, Jeremy takes his lady on a cruise…what’s Bert going to do?
Comment by Jon - BMR — February 24, 2012 @ 6:55 pm
Gold and Silver charts look extremely bullish as well.
Comment by Martin — February 24, 2012 @ 7:16 pm
Jon, if you would have only one stock on the venture to pick in order to ride that Bull market, wich one would choose, no trade 🙂
Comment by Martin — February 24, 2012 @ 7:21 pm
Good question Martin, we wait for the answer Jon, it seems like there are quite a few out there right now with good potential, one that has been mentioned here before that I have been watching and should have bought is GIX geologix, it was up 6 cents today…
Comment by Greg — February 24, 2012 @ 8:57 pm
Gix look great Greg!
Comment by Martin — February 24, 2012 @ 9:26 pm
BMR – when will se see the second part of the RBW report / interview?
Comment by Steve — February 25, 2012 @ 3:35 am
Hi Steve, as we mentioned in yesterday’s Morning Musings, sometime Monday…
Comment by Jon - BMR — February 25, 2012 @ 6:49 am
Martin, I see a lot of great opportunities right now, and there are no doubt other great opportunities that I don’t see…in a roaring CDNX market, there will be quite a few 10-baggers…this happened in 2009 through 2011…and it will happen again…that’s why, personally, I chose Rainbow as my favorite after the due diligence I carried out over the final few months of last year…so RBW is my pick to ride this bull market (it’s market cap is still only $9 million)…I really like the feel of the Rainbow situation at the moment for a wide variety of reasons…they also have people involved (Bob Libin, Jim Decker, David Johnston, Bruce Durham) who can not only talk the talk but have shown they can walk the walk…Libin is an extremely successful Calgary entrepreneur who’s also an ex-broker…he has a lot of connections and I’m sure he’ll be using those connections to help move the company forward both in the market and on the ground…I love the company’s land package…it’s in an under-explored area with a lot of past production (important), high grades and blue sky…the International Property, for example, has never been drilled…I don’t think it takes a rocket scientist to figure out how pumped up the market is going to be when they start drilling right into the heart of the apparent high grade structure that exists on those Crown Grants…if Silver is at a new all-time high and Lead prices are also on the rise, look out…the Rainbow group really won my confidence by completing that PP with almost entirely hard dollars and they are a determined, aggressive bunch with a great story on their hands…of course I can’t say for sure if RBW will be a 10-bagger, but it certainly has many of the ingredients you look for in those potential huge winners…I added to my position this last week and I expect the remainder of the year is going to be quite a ride on the Rainbow Express…GLTA…
Comment by Jon - BMR — February 25, 2012 @ 7:10 am
BMR – Can you please list your top 5 pic, I would be so greatful?
Suggestion – why don’t you have a toplist updated every week or month?
And thanks for all your sharing.
Comment by Bosse — February 25, 2012 @ 7:23 am
Bosse, on Monday morning, as we mentioned in Friday’s Morning Musings, we will be providing a “Strong Play” list and a “Watch List”…so that will highlight what we consider to be some of the best opportunities available…
Comment by Jon - BMR — February 25, 2012 @ 7:30 am
On a cruise eh!!:) LOL… seems it might be a frosty Friday for another one.. lets just say she didn’t enjoy it much.. but a beach in Jamaica??? we are IN!!!!!! and with a smile.
it has been a very tough year… and it is tough to not get smug.. but when you can book trades such as CQX, and holding 2 stocks that are halted (TRR and INT) I have a sense of calmness in my world.
with the people who are here in our small little group makes it better!:)
Ounces in the ground is the mantra… producers for sure.. will make our lives a little better. Coronas anyone??????
Bert – thx for my morning smile:)
and here’s one back.. get your tickets now for the beach boys 50th reunion tour concert. man….. wheelchair city!!!:)
Happy Saturday all!!
Comment by Jeremy — February 25, 2012 @ 7:36 am
and of course where would we be without the good folks at BMR??? guidance is appreciated
Comment by Jeremy — February 25, 2012 @ 7:37 am
Hey thanks Jon, great answer, very appreciated.
”there are no doubt other great opportunities that I don’t see” It’s a vast market to cover that is for sure. You guys are hiring? loll
Have a good week-end!
Comment by Martin — February 25, 2012 @ 8:19 am
Remember to sell in may and go away. Be prepared for massive swings up and down. Just remember that not all is rosy out there. Greece is not solved, some will argue iris worse. Nobody is mentioning Portugal or for that matter, the states. Growth is slowing in china as well. Equity markets have had a huge move recently so I do think the upside is limited. Watch for oil prices to make major headlines. High oil prices have historically caused major contractions. My advice is to careful.
Comment by Moosey — February 25, 2012 @ 12:17 pm
It is all about timing, you can be right and be off on the timing and still lose money, believe me I know, hopefully timing is right in March for many of these jr’s, hopefully, this time I am taking profits if given the chance..
Jim Sinclair said the other day the time is coming when gold will have $400.00 dollar swings per day, un real volatility. He sure has been right about the price of gold..
Comment by Greg — February 25, 2012 @ 1:52 pm
Jeremy,
wheelchair city, watch it I might run you over in mine, lol
Comment by Greg — February 25, 2012 @ 1:53 pm